The Blog

Stanley Druckenmiller: Algos Have Taken The Rhythm Out Of The Market

Here’s a great video with Stanley Druckenmiller at Real Vision discussing the impact that algorithms are having on his investing strategy saying:

“These algos have taken all the rhythm out of the market and have become extremely confusing to me.”

Here’s an excerpt from that video:

Druckenmiller: I’ve also struggled mightily– and this is really concerning to me. It’s about the most trouble I’ve been about my future as a money manager maybe ever is what you mentioned– the canceling of price signals.

But it’s not just the central banks. If it was just the central banks, I could deal with that. But one of my strengths over the years was having deep respect for the markets and using the markets to predict the economy, and particularly using internal groups within the market to make predictions.

And I think I was always open minded enough and had enough humility that if those signals challenged my opinion, I went back to the drawing board and made sure things weren’t changing.

These algos have taken all the rhythm out of the market and have become extremely confusing to me.

And when you take away price action versus news from someone who’s used price action news as their major disciplinary tool for 35 years, it’s tough, and it’s become very tough.

I don’t know where this is all going. If it continues, I’m not going to return to 30% a year any time soon, not that I think I might not anyway, but one can always dream when the free money ends, we’ll go back to a normal macro trading environment.